The Currency in Iceland & Guide to the Icelandic Krona

History of the Currency of Iceland

Iceland was a territory of Denmark from the 14th century to the 19th century. However, it was only in the 1870s that the Danish krone was introduced in the country after replacing an older Danish currency, the rigsdaler.

Photo from Wikimedia, Creative Commons, by Windrain. No edits made.

At the beginning of the 20th century, Iceland became autonomous from Denmark. As a result, the Icelandic government started issuing the Icelandic krona, making it its official currency.

You can learn more about Denmark and Iceland's story through this complete history of Iceland.

Icelandic Currency Through the Ages

Iceland has been issuing banknotes since 1885. Its first banknotes are the 5, 10, and 50 kronur. However, it was only in the 1920s that Iceland started issuing coins, beginning with the 10 and 25 aurar (now obsolete).

In 1925 and 1926, five more coin denominations were added. These denominations are:

- 1 krona

- 2 krona

- 1 eyrir

- 2 aurar

- 5 aurar 

Photo from Wikimedia, Creative Commons, by Arvedui89. No edits made. 

After the second world war, in 1946, the Icelandic currency's coins were redesigned to remove the royal monogram of Denmark. 

In 1981, Iceland revalued its currency and added new coins in 5, 10, and 50 aurar denominations. However, in 2003, all coins denominated in the aurar were taken out of circulation. 

Iceland's Currency Crisis in 2008

Iceland is now one of the most livable countries in the world. However, did you know it experienced a financial crisis in early 2008? 

In 2008, the world experienced a global financial crisis, significantly affecting many countries, including Iceland. 

Three of Iceland's primary banks collapsed, resulting in the country's economic slump. Other factors, such as the banks' inability to finance short-term loans and people simultaneously withdrawing their money due to fear, added to the problem. 

Photo from Unsplash, by Evelyn Paris. No edits made. 

In addition, Iceland's currency lost a lot of value against the Euro before eventually collapsing. 

Due to these difficulties, the country got emergency funding from the International Monetary Fund (IMF), and currency training was restricted. 

The changes were able to help the country get back on its feet, and Iceland's currency has remained stable. 

Historical Figures Gracing the Icelandic Krona Banknotes

Photo from Flickr, by Tom Jarrett. No edits made. 

Currently, Iceland's currency has five banknotes in circulation. 

If you look closely, you'll notice that each bill features an image of a person. These people are some of Iceland's most famous and prominent historical figures. 

Meanwhile, activities or locations related to the main figure in the banknote are on the other side of each Icelandic krona bill. 

Here are the names and contributions of these historical figures to Iceland. 

Jon Sigurdsson - 500 Krona

Photo from Flickr, by Benjamin Friedman. No edits made. 

Jon Sigurdsson, a statesman, is one of the leading figures in Iceland's independence movement against Denmark in the 19th century. He's also a scholar who has compiled stories and documents of the Old Norse sagas and created a crucial part of Icelandic literature, the Icelandic Sagas.

The banknote is color red. 

On one side of the banknote, you'll see Sigurdsson. However, on its back is a usual scene when he was alive, with him writing on his desk, surrounded by books, and a tapestry behind him. 

Brynjolfur Sveinsson - 1,000 Krona

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Brynjolfur Sveinsson is a bishop in the 17th century known for his intelligence and stubbornness. Aside from that, he's a champion of the clergy and advocates the rights of the people involved. 

In some writings, he's described as a genius debater and is said to help build a church in Skalholt, improve it, and get excellent instructors. 

The 1,000 krona banknote has a predominantly purple color on a multicolored underprint. 

On one side of the note is Sveinsson, and on its back is the Brynjolfskirkja church at Skalholt town. 

Johannes Kjarval - 2,000 Krona

Photo from Flickr, by James McNally. No edits made. 

Johannes Kjarval was a pioneer of Icelandic art in the 20th century and one of the most revered artists in Iceland. He created thousands of artworks, including his interpretation of Iceland's nature. Many of these are displayed at the Kjarvalsstadir art museum. 

Hist artworks include styles from various art movements, such as expressionism, abstract, and cubism. 

The 2,000 krona banknote has a blue-violet and yellow print. 

At the front is an image of Kjarval and a detail from his "Outside and Inside" painting. Meanwhile, at the back are details from his artworks, "Yearning for Flight" and "Woman and Flowers." 

Ragnheidur Jonsdottir - 5,000 Krona

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Ragnheidur Jonsdottir was a beloved 17th Century embroiderer who was married to a bishop. In these times, bishops and their families were some of the most influential people in the country.

The 5000 krona denomination is the only currency in Iceland with a woman figure printed on it. 

At the front is Jonsdottir, with his husband, and the two earlier wives of her husband. Meanwhile, at the back is Jonsdottir, instructing two girls on embroidery.

Jonas Hallgrimsson - 10,000 Krona

Photo from Flickr, by Boyko Blagoev. No edits made. 

Jonas Hallgrimsson is one of the most admired poets in Iceland. He's a Romantic poet who helped usher in a new movement in Iceland's poetry scene. 

He also helped found the Icelandic magazine, Fjolnir, invoking nationalism in the citizen to resist the Danish rule during his time. 

The banknote has a predominantly blue color. 

At the front is an image of Hallgrimsson. Meanwhile, on the other side is an illustration of a plover bird and his poem, "Skjaldbreidur Mountain." 

How Much Does It Cost to Stay in Iceland? 

How expensive is Iceland? The answer is Iceland is a relatively costly place to live in. In fact, according to the World Population Review, as of August 2022, it's listed in the top ten most expensive countries to live in.

Aside from housing, food can be expensive in Iceland because the country greatly relies on imported goods. 

Meanwhile, the estimated cost for foreign visitors can vary between 100 USD and 200 USD per day. The price depends on the type of accommodation, transportation, and meals. 

Photo from Wikimedia, Creative Commons, by Richard Eriksson. No edits made. 

On accommodations, it can cost as low as 35 USD per night or as high as 300 USD per night. Depending on the area, and amenities of each accommodation, the price can still go higher or lower. 

Food at an inexpensive restaurant can cost around 17 USD per meal. 

When riding Reykjavik city buses, a single ticket costs around 3 USD, while for those using a rental car, the gas can cost about 2 USD per liter. 

Fortunately, there are many affordable ways to enjoy Iceland. You can swim in its hot springs, join affordable sightseeing tours, or independently hunt for the beautiful northern lights in Iceland. 

Tips for Saving Money in Iceland

Iceland can be expensive. However, as a traveler, there are ways to help you save money. Here are some of them. 

Book Everything in Advance

If you want to explore, make sure to book everything in advance. This includes renting a car in Iceland, booking a tour, and even booking airport transfers. 

When you book in advance, you have more time to compare different options and get the cheapest offer. Also, the earlier you book, the better deal you'll get from various car rental and travel companies.

You can also check our affordable car rentals in Iceland if you want to start looking for one now. 

Take the Bus When Possible

Car rentals are one of the best ways to travel and reach different parts of Iceland. However, if you're traveling alone, car rentals can be expensive. Fortunately, you can also travel by bus. 

Straeto buses operate across Reykjavik city and in many famous sights in the countryside. 

You can pay using your debit or credit card and cash when you board a bus in Reykjavik.

There are also busses that take you directly to your chosen destination. For example, this Blue Lagoon transportation from Keflavik airport allows convenient transfer at an affordable price. 

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Stay at a Campsite or a Hostel Instead of a Hotel

There are many hotels in Iceland. However, hotels in Iceland can be expensive and too much if you're trying to budget.  

If you want to stay at a place for a lower cost, check out campsites or hostels in Iceland. These options can help you cut your accommodation expenses by almost half. 

Hostels often have a common area, which allows you to make friends on your travel, and a kitchen so you can cook your meals.

Photo from Unsplash, by Pavel Brodsky. No edits made. 

Meanwhile, campsites are a great place to stay if you want to visit Iceland's natural attractions and immerse in them. Aside from being affordable, campsites have their own bathroom, showers, and electricity. Many are even nearby shops and restaurants. 

Check out our guide to camping in Iceland if you want to learn more about it. 

Always Bring a Refillable Water Bottle

Bring a refillable water bottle or container anywhere you go so you can save money by not buying from the store. 

Photo from Fantastic 2.5 Hour Easy Glacier Hike & Sightseeing Discovery Tour on Solheimajokull.

Whether planning to go on an outing or stay at a paid accommodation, having your own water container can help save you money. 

Tap water in Iceland is clean and safe, so refill your water bottle as often as possible. 

When outside, for example, on a trekking journey, there are also water sources you can use to refill your water.

Useful Information About Currency in Iceland 

Knowing the standard practices in Iceland regarding money ensures less hassle on your part and better planning before your trip.

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Learn what those practical pieces of information are so that you can apply them during your trip. 

Credit Cards vs. Money

Cash is accepted in Iceland. However, most people who travel to Iceland, and even the locals, prefer to pay through a credit or debit card than cash. 

Businesses, even with small purchases, accept cards. 

For credit cards, most businesses in Iceland accept major credit cards such as VISA and MasterCard. Meanwhile, not all businesses accept American Express. For debit cards, many accept Electron and Maestro cards.

Photo from Wikimedia Creative Commons, by Petr Kratochvil. No edits made. 

If you prefer to bring cash, there are ATMs you can use to withdraw money. Fortunately, ATMs are available anywhere in Iceland. 

You can also exchange money from your home country before traveling to Iceland. 

Exchanging Your Currency

The best place to exchange your currency in Iceland is through banks. 

As soon as you land in Iceland at the Keflavik International Airport (KEF), you can change your currency at the Arion Bank. 

Photo from Wikimedia Creative Commons, by Antony-22. No edits made. 

If you have a direct transfer to Reykjavik, there're many regular banks you can go to exchange your money, such as Arion Bank, Islandsbanki, and Landsbankinn. 

ATMs in Iceland

Many Automated Teller Machines (ATMs) are available in Iceland, from its big cities to even its smaller villages. However, many of them are situated in the capital city of Reykjavik and at the Keflavik International Airport. 

Iceland is generally card-friendly, but bringing a few Icelandic kronurs in your wallet is always wise, especially when visiting the countryside. Moreover, make sure to withdraw money in Reykjavik or at the Keflavik airport. This can help you avoid future hassle and trouble if it's not accessible to get cash in other parts of Iceland. 

About Tipping in Iceland

Tipping is not mandatory in Iceland. However, if you want to give tips to the service crew of the establishments you visit, you're free to do so. 

Tour guides, in particular, appreciate being tipped.

Often, the total amount in many bills already includes service charges. In addition, Iceland's workers make decent wages in most industries. Thus, tipping is not as crucial as in other countries such as the US. 

Photo from Flickr, by Viv Lynch. No edits made. 

Shopping Tax-Free

Foreign visitors are entitled to a VAT-free purchase of at least 6,000 ISK for a single receipt when shopping in Iceland. 

However, note that this is limited to purchases meant to be taken out of the country. 

To get a tax refund, visitors should get a Tax Refund Cheque at the store counter after purchase. 

Before flying out of Iceland, at the Keflavik International Airport, visitors can cash their cheques in the currency of their choice. 

Photo from Wikimedia Commons, by Ziko van Dijk. No edits made. 

Frequently Asked Questions About Money in Iceland

Here are the answers to some of the commonly asked questions people ask about Iceland's currency.

Can You Use Euro in Iceland? 

Yes, you can use Euro in Iceland, but in limited places only. 

Iceland is not part of the European Union (EU), so it doesn't use Euro as its currency. However, there are few businesses, especially the ones near the business center, that accept Euro, as well as US dollars. Since that's the case, bringing Euro currencies won't be practical when you visit the country. 

Photo from Flickr, by Images Money. No edits made. 

Moreover, the value of Iceland's currency is higher than that of the Euro or even the US dollar. That's why it can be difficult to convert them mentally or while you're on the go. 

What's the Best Currency To Bring to Iceland?

It's best to bring the Icelandic krona when you visit Iceland since only a few business establishments accept other currencies.

How Much Money Should You Bring When You Go to Iceland?

The short answer is the less money you bring, the better since most merchants in Iceland use cards. However, if we're talking about how much budget you should have while in Iceland, the answer is around 700 USD to 1,365 USD per person for one week. 

This estimated amount is based on various expenses, including accommodation, food, and gas price. 

Photo from Flickr, by Caden Young. No edits made. 

What Are the Different Ways To Pay in Iceland?

Most establishments in Iceland accept credit and debit cards for payment and cash. 

Aside from those, prepaid cards, such as prepaid Visa cards, Apple Pay, and Google Pay, are also accepted in some establishments in Iceland. 

Photo from Flickr, by Marco Verch. No edits made. 

We hope this article helps shed light on all of your questions about Iceland's currency. In addition, we hope that the tips are enough so you can plan for the best Icelandic vacation. You can also check out our article on the best things to do in Iceland or the top five destinations in Iceland to help you plan. 

Let us know if there are more questions you need to be answered. Don't hesitate to leave your comments and queries below.